There are more than 220 manufacturing software solutions to address all aspects of manufacturing, from product inception to customer delivery. We’ve written this buyer’s guide to help manufacturers navigate this complex market.
Here’s what we’ll cover:
What Is Manufacturing Software?
Common Features of Manufacturing Software
Manufacturing Software BuyerView | 2014
Where Type of Buyer Are You?
Market Trends to Understand
Benefits of Manufacturing Applications
Recent Events You Should Know About
Manufacturing ERP software assists with the planning and execution of manufacturing projects by tracking suppliers, materials and production costs and supporting the maintenance of relationships with end customers. This class of software covers the gamut of ERP—from the accounting systems that track accounts for international giants, to the shop scheduling system that your local metal shop uses. Regardless of the scale of the system, software for manufacturers helps increase productivity and improve management of the product life cycle—from design concept to production planning to field service.
|Material requirements planning (MRP)||Automates the front end of the production process. Functions include planning and costing of materials, labor and equipment; automated quoting and order processing and resource scheduling. Systems should also process advanced shipping notification from suppliers to reduce receiving errors and report any changes in cycle counts for inventory management.|
|Manufacturing execution system (MES)||Controls the actual production phase and shop floor operations. Functions include work-in-progress reporting, production tracking, labor tracking, equipment utilization and scrap reporting.|
|Manufacturing accounting||Manages all of the financial transactions and operations for a company. In addition to the traditional accounting functions of general ledger, accounts payable and receivable, inventory and payroll, the accounting application includes support for sales orders, purchase orders, change orders, work-in-progress reports and job costing modules.|
|Production planning & scheduling||Creates production schedules, including reviewing inventory levels, tracking lead times and making build-versus-buy decisions. This is a subset of MRP; planning and scheduling does not generally include automatic ordering or inventory tracking functionality.|
|Product life cycle management (PLM)||Organizes all manufacturing information around to the designing, producing, supporting and disposing of manufactured goods. May include computer-aided design software, bill of materials data and document management.|
Over the years, we've spoken to thousands of manufacturing software buyers. As a point of reference, we thought it would be helpful to provide potential buyers with an overview of past clients' pain points and reasons for switching to a new system. Key questions analyzed by the report include:
The specific type of system you need depends on what kind of company you are, what problems you’re experiencing, or what objectives you set. Here are a few common situations in which buyers find themselves.
You’re looking to consolidate applications into a single system. This kind of buyer values the seamless integration of data and processes that comes from having one ERP software system for all functions. For example, it can be helpful to have a full-suite system for estimating, work-in-progress management and accounting so you can automatically turn an estimate into a budget for project management, and then match invoices to project status while allocating job costs. If you’re a large manufacturer, you should evaluate enterprise-level suites like SAP, Oracle, Sage ERP or Microsoft Dynamics AX. We recommend systems such as Epicor, NetSuite and MISys Manufacturing for small to mid-sized firms.
You run a subsidiary manufacturing division of a larger company. Businesses running from multiple locations need a way to stay tuned in to one another. Smaller subsidiaries will require a smaller, less robust system to complement the larger system used at the company’s main headquarters. You’re likely looking for a “two-tier ERP.” NetSuite, for example, is a good choice here because of its fast time to deployment, which is useful for a division that needs to get up and running with an ERP system quickly.
You need to improve one process (e.g., shop floor operations). Some buyers will find that they only need a single application, such as manufacturing resource planning software, to improve their production. If you’re in a small job shop industry like sheet metal fabrication, an efficient MRP system that can schedule the production of each customer’s order is key. Job shop specialities have a smaller scope, and need a solution that suits their focus. Exact JobBOSS and Casco ShopVue are good solutions here as they both offer strong MES and job shop control.
You’re a small manufacturer. Small manufacturers often spend too much time tracking information such as inventory in spreadsheets or by other manual means, which is prone to errors. You need an automated system for small manufacturers that is more reliable than a “pen and paper” method of managing important data, and you are probably on a tight budget. A good solution here is Fishbowl—an affordable program that has the ability to integrate with QuickBooks, which is useful given that many small manufacturers are already using this program for their accounting needs.
You’re a job shop or process manufacturer with unique needs. General systems aren't specialized enough for you. If you’re a process manufacturer, for instance, you may have difficulty with your bill of materials functionality. You’re the type of buyer who will rely heavily on a system that includes a strong inventory control feature that can adjust to many different kinds of units of measurement.
A system such as ProcessPro that is specifically designed for process manufacturers would be a good fit. You will also need inventory management that can integrate with your most important system: the MRP application. Infor is a good provider for niche manufacturers to consider as they offer extensive vertical functionality thanks to their acquisitions of smaller, niche providers.
Meanwhile, job shops such as metal fabricators or aerospace manufacturers also have specialized needs. For example, the shop floor may have special fabrication machines which require special control systems that integrate with specific job shop software. Additionally, some organizations will require industry-specific functionality. For this reason, we have created unique guides for aerospace, apparel, chemical, electronics, food and beverage and pharmaceutical manufacturers.
Several industry-wide trends are worth keeping in mind as you shop for a manufacturing software solution:
Vendor consolidation. Large vendors like Infor, Oracle and Microsoft are buying niche vendors to round out their portfolios and offer more functionality. With so many vendors and products in this fragmented market, this trend will continue for the foreseeable future.
Intelligent inventory tagging. The use of one-dimensional bar coding for equipment and inventory tagging is well established in manufacturing systems. Recent systems use radio frequency identification (RFID), which can be read remotely, to check inventory levels and to confirm equipment availability. Other systems use two-dimensional bar codes which contain descriptive information in addition to an identifier like a part number.
Adoption of cloud technologies. Cloud-based systems are still the exception rather than the rule. However, more and more manufacturers are choosing software-as-a-service (SaaS) applications. SaaS reduces the maintenance costs in computer infrastructure and frees up capital to invest in shop equipment and elsewhere.
Use of mobile devices. Until recently, most inventory system designers assumed that users would be working from a fixed location. There were small mobile devices used for inventory control and parts identification, but most information had to be either remembered or written down and then brought to the computer. The new trend is to have completely mobile workstations on a wireless network in the warehouse or on the shop floor. Operators enter pertinent information directly into their system via mobile devices without having to go to a permanent workstation.
Some of the specific benefits of implementing a manufacturing solution include:
Better planning and resource allocation. One of the greatest benefits of a manufacturing solution is better data and insight into the actual costs of inventory, people and equipment and the time needed for each step of the planning and production process.
Greener operations. Better planning and tracking leads to operations that generate less waste and less scrap, reducing environmental impact for those firms. Additionally, as more documentation is kept electronically, it reduces waste paper and cuts paper costs.
Support for lean manufacturing. Better planning, better resource allocation and reduced waste are all goals of lean disciplines.
Producing compliance documentation. Many manufacturers are subject to strict compliance regulations because of the materials they use, the products they manufacture, or the raw materials they consume. Software can generate much of the required documentation as a consequence of ordering and receiving materials and equipment.
Exact to increase cloud-based software offerings. In October 2014, Apax Partners LLC purchased leading ERP software vendor Exact, and announced plans to scale up its portfolio of cloud-based software solutions. Exact currently offers on-premise and cloud-based financial, logistics and marketing solutions for small and midsize businesses.
U.S. and European Union impose sanctions on Russia. In July 2014, the U.S. and EU imposed sanctions on Russia over the ongoing crisis in Ukraine, which include cutting off the supply of dual technologies (technology that can be used for both military and civil/commercial purposes) to the Russian military and advanced equipment for oil production. Concerns have subsequently been raised that these sanctions will negatively affect the manufacturing industry in the U.S. and subsequently, the U.S. job market.
HP unveils 3D printing technology. HP announced its entrance into the 3D printing market in October 2014 with Multi Jet Fusion, its industrial printing technology. This technology, which is 10 times faster and 50 percent cheaper than current 3D printing solutions on the market, may make 3D printing more accessible to small businesses.
We're able to offer this service to buyers for free, because software vendors pay us on a "pay-per-lead" basis. Buyers get great advice. Sellers get great referrals.